Critical Review: Embotelladora Andina (NYSE:AKO.B) and PepsiCo (NASDAQ:PEP)

Embotelladora Andina (NYSE:AKO.B) and PepsiCo (NASDAQ:PEP) are both consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, dividends, analyst recommendations, institutional ownership, valuation and profitability.

Analyst Ratings

This is a breakdown of current ratings and price targets for Embotelladora Andina and PepsiCo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Embotelladora Andina	0	1	0	1	3.00
PepsiCo	1	12	7	0	2.30

PepsiCo has a consensus target price of $157.90, indicating a potential upside of 15.56%. Given PepsiCo’s higher possible upside, analysts clearly believe PepsiCo is more favorable than Embotelladora Andina.

Dividends

Embotelladora Andina pays an annual dividend of $0.74 per share and has a dividend yield of 2.4%. PepsiCo pays an annual dividend of $5.92 per share and has a dividend yield of 4.3%. Embotelladora Andina pays out 36.3% of its earnings in the form of a dividend. PepsiCo pays out 77.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PepsiCo has increased its dividend for 54 consecutive years. PepsiCo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Embotelladora Andina and PepsiCo”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Embotelladora Andina	$3.52 billion	1.36	$295.57 million	$2.04	14.89
PepsiCo	$96.90 billion	1.92	$8.24 billion	$7.63	17.91

PepsiCo has higher revenue and earnings than Embotelladora Andina. Embotelladora Andina is trading at a lower price-to-earnings ratio than PepsiCo, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Embotelladora Andina has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, PepsiCo has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.

Profitability

This table compares Embotelladora Andina and PepsiCo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Embotelladora Andina	8.70%	24.47%	8.89%
PepsiCo	10.78%	54.63%	10.49%

Institutional and Insider Ownership

1.6% of Embotelladora Andina shares are owned by institutional investors. Comparatively, 73.1% of PepsiCo shares are owned by institutional investors. 0.0% of Embotelladora Andina shares are owned by company insiders. Comparatively, 0.1% of PepsiCo shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

PepsiCo beats Embotelladora Andina on 14 of the 18 factors compared between the two stocks.

About Embotelladora Andina

Embotelladora Andina S.A., together with its subsidiaries, produces, markets, and distributes Coca-Cola soft drinks in Chile, Brazil, Argentina, and Paraguay. It also offers fruit-flavored beverages, juices, sports and energy drinks, ice tea, and bottled water. Embotelladora Andina S.A. was founded in 1946 and is headquartered in Santiago, Chile.

About PepsiCo

PepsiCo, Inc. engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide. The company operates through seven segments: Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America; Europe; Africa, Middle East and South Asia; and Asia Pacific, Australia and New Zealand and China Region. It provides dips, cheese-flavored snacks, and spreads, as well as corn, potato, and tortilla chips; cereals, rice, pasta, mixes and syrups, granola bars, grits, oatmeal, rice cakes, and side dishes; beverage concentrates, fountain syrups, and finished goods; ready-to-drink tea, coffee, and juices; dairy products; and sparkling water makers and related products, as well as distributes alcoholic beverages under Hard MTN Dew brand. The company offers its products primarily under the Lay’s, Doritos, Fritos, Tostitos, BaiCaoWei, Cheetos, Cap’n Crunch, Life, Pearl Milling Company, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, Rice-A-Roni, Aquafina, Bubly, Emperador, Diet Mountain Dew, Diet Pepsi, Gatorade Zero, Crush, Propel, Dr Pepper, Schweppes, Marias Gamesa, Ruffles, Sabritas, Saladitas, Tostitos, 7UP, Diet 7UP, H2oh!, Manzanita Sol, Mirinda, Pepsi Black, Pepsi Max, San Carlos, Toddy, Walkers, Chipsy, Kurkure, Sasko, Spekko, White Star, Smith’s, Sting, SodaStream, Lubimyj Sad, Agusha, Chudo, Domik v Derevne, Lipton, and other brands. It serves wholesale and other distributors, foodservice customers, grocery stores, drug stores, convenience stores, discount/dollar stores, mass merchandisers, membership stores, hard discounters, e-commerce retailers and authorized independent bottlers, and others through a network of direct-store-delivery, customer warehouse, and distributor networks, as well as directly to consumers through e-commerce platforms and retailers. The company was founded in 1898 and is based in Purchase, New York.